The Supreme Court Denies a Child Labor Claim against U.S. Firms

Concerns have been raised by human rights activists about the possibility that serious abuses in West Africa’s cocoa fields will continue after a recent U.S.

Supreme Court decision. Although the Supreme Court did not find major U.S. chocolate companies guilty of the violations, it maintained the principle that American businesses can be held accountable for violations of fundamental human rights. U.S.-based companies will need to pay attention.

The Supreme Court Denies a Child Labor Claim against U.S. Firms

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Six people from Mali sued Nestle USA, Cargill, Inc., the two largest cocoa product manufacturers in the world.

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The Supreme Court Denies a Child Labor Claim against U.S. Firms

They claimed they were trafficked [PDF] to the Ivory Coast to work as slaves, harvesting cocoa beans for the American market. The companies were accused of aiding and supporting child slavery through operational decisions at their U.S. headquarters.

The plaintiffs were sided by the Ninth Circuit Court of Appeals, San Francisco. The companies appealed to Supreme Court. Oral arguments that foreshadowed the final result were heard last December. Although the Court of Appeals decision was reversed by the Supreme Court, the case was reopened for further evidence and review.

Although plaintiffs’ claims were denied, the court upheld the claim with astonishing clarity, specifically the Alien Tort Statute of 1789. This centuries-old law permits foreign nationals to sue U.S. or foreign defendants for torts which violate the “laws of nations”. The plaintiffs’ claim was not successful.

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Corporate liability is still available under the ATS. However, aiding and abetting claims are also possible. To support the claim that aiding and abetting child slave labor in West Africa was being pursued by the Malian plaintiffs, the court ruled that they should have presented more evidence about the domestic conduct of the Malian companies in the United States. This will be the main challenge in any future litigation.

What was the court’s decision regarding the Alien Tort Statute case?

Two Supreme Court decisions have greatly limited the scope of ATS enforcement over the past decade. The statute has no extraterritorial applications [PDF] and foreign corporations are not permitted to sue under it [PDF].

Defense attorneys tried to eliminate corporate liability in the Nestle matter. The defendants sought limitability of actionable torts by limiting them to the three categories of torts that the court had identified under international law 1789: violations and safe conducts, infringements rights of ambassadors, as well as piracy.

The issue was ignored by most of the conservative and liberal justices. Justice Clarence Thomas wrote a controlling opinion that denied Nestle USA and Cargill a win. The ATS does not exempt corporations from liability. Conservative Justices Samuel Alito and Neil Gorsuch argued that the ATS could be used against American corporations as a fundamental rule of tort law. The issue was not raised by the other justices.

What does this mean for U.S. businesses?

The court ruled that the “mere corporate presence” in the United States and “general corporate activity,” are not sufficient “to support a domestic ATS application.” To prove liability, it could be necessary to show that corporate officers plotted to help and aid child slavery on another continent. To reveal corporate explicit decisions, one could need to whistleblower support or extremely successful discovery orders.

If this evidence can be obtained to show that a multinational corporation’s decisions at its U.S. headquarters resulted in an atrocity crime like child slavery in a foreign nation, then the ATS could potentially be enforced to inflict damages on that company. Rights activists are concerned that multinational corporations might seek out ways to take decision-making from the United States, such as by arranging board meetings outside of U.S. borders.

Six justices upheld the court’s ATS precedent Sosa v. Alvarez Machain (2004). Sosa was a court decision that confirmed [PDF] the enforceability and validity of three historical international torts. However, it refused to “close” the door on accepting additional “actionable international norms”.

Sonia Sotomayor and Stephen Breyer, Liberal Justices, and Elena Kagan, concurred in an opinion. Amy Coney Barrett and John Roberts, conservative Justices, acquiesced in silence. Justice Alito acknowledged the power of Justice Thomas’s contrarian view but did not endorse it. Justices Gorsuch, Brett Kavanaugh and Justice Alito shared that view.

Verdict

Sotomayor cited the Sosareasoning and wrote in the concurring opinion:  Courts must, basing their interpretations of international law, identify the norms so specific, universally and obligatory that they give rise a tort for which Congress expects federal court to entertain causes [the ATS for redress.

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